The Government should act “ruthlessly” to cut subsidies paid to green energy producers in order to reduce household bills, a report has recommended.

The Policy Exchange think tank said renewable energy subsidies should be reduced if the technologies fail to come down in cost under strict time limits.

The report urges the Government to hold the offshore wind industry to claims it can reduce its costs significantly by the end of the decade.

Earlier this month ministers increased state help for offshore wind, with a strike price of £140/MWh for 2018/19, £5 higher than previously planned.

But the Policy Exchange report argued that the offshore industry aimed to get its costs down to £100/MWh for projects beginning in 2020.

The report called for the Government to speed up the introduction of auctions, instead of fixing predetermined strike prices for renewable producers.

The paper argues that for mature technologies, such as onshore wind farms, auctions in which different forms of renewable energy bid against each other for state support should be introduced as early as next year for projects commissioning in 2017.

Simon Moore, the report’s author, said: “The Government needs to act more ruthlessly to reduce household energy bills by cutting state support for renewable technologies that do not come down in price.

“Offshore wind may play an important role in our future energy mix. But it should not be given favourable treatment at the expense of other low carbon technologies which could reduce our carbon emissions at a much cheaper price.”

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